After shaking the grocery industry with its deal with retail giant Amazon, Whole Foods revealed that the historic fusion came after a round of negotiations was made by them seeking partners for the future.
The Austin-based company received a letter of intention from an “industry participant” to explore strategic opportunities, according to a regulatory filing made by Whole Foods last week.
Other key findings exposed by the regulatory filing include Whole Foods had six suitors at one point and was the one to initiate the approach for the eventual deal with Amazon.
After April 10, Jana Partners bought 8.8% of Whole Foods’ stock, the CEO of the Texas company discussed the possibility of a deal with Amazon given the interest showed in the grocery retailer.
But after receiving a proposal from the company listed as “Company X” in the filing that priced Whole Foods’ stock between $35 to $40 a share with a merge of equals, the advisors for the Texas company Evercore told the board of directors that Amazon’s offer would surely exceed “what a private equity buyer could pay.”
In the end, Amazon outmaneuvered six companies and equity firms to seal the deal but not before using every leverage imaginable. For instance, the regulatory filing stated that after agreeing to negotiate, the first offer from Amazon was $41 per share, and then Whole Foods made a counteroffer of $45 per share. After that, Goldman Sachs, who served as financial advisor to Amazon in this process, rejected that plan. Later, the bankers communicated that even Amazon was “considering others’ opportunities instead of acquiring” Whole Foods.
“Mutual friends set us up on a blind date. It was truly love at first sight,” said Whole Foods CEO John Mackey to his companies’ employees in a townhall meeting two weeks ago, according to Reuters. After the regulatory filing, it seems more like the Austin-based company already had explored the dating scene and found zero possible matches when Amazon came along as its Prince Charming.
Marco Islas for TechFunnel.com